28 November 2018

Call for national housing strategy, with Canberra one of worst places in country to rent

| Ian Bushnell
Join the conversation
New public housing stock in the ACT. Photo: ACT Public Housing Renewal Taskforce

New public housing stock in the ACT. Photo: ACT Public Housing Renewal Taskforce.

It has become even harder for low-income people and essential workers to find an affordable property to rent in the ACT, with rent taking up an increasing proportion of income, the latest release of the Rental Affordability Index (RAI) has found.

An indicator of the price of rents relative to household incomes based on new rental agreements – the RAI – is released twice a year by National Shelter, Community Sector Banking, SGS Economics & Planning and the Brotherhood of St Laurence.

A RAI of 100 and below shows that households would be required to spend at least 30 per cent of their income on rent. A RAI of 100-120 shows that households are facing moderately unaffordable rents. Canberra now has a RAI of 128, down from 136 in the June quarter of 2017.

It says rental affordability has deteriorated across the city since this time last year, and the ACT remains the second worst performing capital city behind Sydney for lower income households needing to rent.

National Shelter Executive Officer Adrian Pisarski, in Canberra for the RAI’s release at Parliament House, said Canberra’s high average incomes were part of the problem and for anyone on less than $90,000 a year, rental housing is unaffordable. “The lower your income the worse and worse it gets,” he said.

Groups particularly affected are pensioners, single-income families, minimum-wage couples, students and hospitality workers.

For example, renting would cost the following groups:

  • Single pensioner on benefits: 74 per cent of income (extremely unaffordable)
  • Couple pensioner on benefits: 47 per cent of income (extremely unaffordable)
  • Single person on benefits: 114 per cent of income (extremely unaffordable)
  • Single part-time worker parent on benefits: 58 per cent of income (severely unaffordable)
  • Student share house: 34 per cent of income (unaffordable)
  • Minimum wage couple: 33 per cent of income (unaffordable)
  • Full-time hospitality worker: 38 per cent of income (unaffordable)

Mr Pisarski said the ACT Government’s affordable housing strategy, with its mix of social housing initiatives, inclusionary zoning and other elements, was one of the best in the country but overall a national approach was needed.

“We’re looking at a population of 50 million by 2050, we’ve got a housing affordability crisis now, and we’ve been under-investing in social housing for a very long time,” he said.

“There are so many different elements to getting housing affordability right that require all levels of government to be involved. It’s about tax reform, planning systems reform, direct investment, leveraging private finance, not to mention all levels of government finding more land to build more housing.”

It required a national strategy to coordinate all that, led by the Commonwealth, he said.

He was hopeful that Federal Labor would take a strong housing policy to the election due in May, and said even the Morrison Government was beginning to realise the scale of the problem.

He agreed with Chief Minister Andrew Barr that reforms to negative gearing and capital gains tax concessions that have fuelled the property boom need to be a part of that, and rejects the scare campaign from industry, which sees even more tax breaks as the solution.

Investors withdrawing from the market would only open up avenues for owner occupiers now stuck in the rental market, which in turn would relieve pressure there, he said.

Increasing the number of homeowners, particularly among the young who have been shunning the market, was also part of the needed multi-prong strategy.

“We need a national housing strategy, so that we can have a sensible flattening of house prices while we increase wages and incomes, so that people have a chance to catch up in terms of housing affordability, and then we increase affordability and that takes pressure off the rental market, but at the same time if we’re building more affordable rental housing we’re providing options for those people who currently can’t afford it and therefore taking pressure off the whole system,” he said.

Mr Pisarski said it wasn’t just a matter of building new supply but that it was actually building the right kind of supply for the cohorts of people who need it, pointing to the so-called “glut’ of apartments in Sydney and Melbourne that are just ‘parked capital’ and don’t even reach the rental market.

“The shortfall for affordable housing nationwide is 500,000 properties and it’s going to take 25 years to meet it, and it’s going to require a combination of strategies to build more affordable housing for those cohorts such as pensioners, people with disabilities and young people who can’t afford to leave home,” he said.

Subsidised rental housing was going to be required for increasing numbers of people, and growing homelessness was the future the country faced if government didn’t do something about it.


Join the conversation

All Comments
  • All Comments
  • Website Comments

It’s such a complex and multi factor issue, with Federal and Territory Governments continuing to point the finger at the other party. But they are both to blame.

Certainly the reduction in land release and the Rates and Land Tax increases have had the greatest impact over the last few years.

The only thing we can all agree on is that it’s low income renters and the poirer homeowners who have suffered the most.

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.